agenda aegon agm 2010
TRANSCRIPT
investments pensions life insurance
the hague, april 29, 2010�
agenda
annual general Meeting
of ShareholderS
ageNDa annual general Meeting of Shareholders 3 / 24
annual general Meeting of Shareholders (agM) of aegon n.V. (the 'Company') to be held at 10.00 a.m. on thursday,
april 29, 2010 at the aegon headoffice, aegonplein 50, the hague, the netherlands.
ageNDa
1. opening (*)
2. presentation on the course of business and significant events in 2009 (*)
3.1 annual report 2009 (*) 3.2 corporate Governance chapter in the annual report 2009 (*) 3.3 annual accounts 2009: proposal to adopt the annual accounts 2009
4. Dividend 2009 (*)
5. proposal to release the members of the executive Board from liability for their duties
6. proposal to release the members of the supervisory Board from liability for their duties
7. proposal to appoint the independent auditor
8. proposal to amend the articles of association of the company
9. proposal to adopt a new executive Board remuneration policy
10. proposal to adopt amendments to the supervisory Board remuneration policy
11. proposal to reappoint mr. K.J. storm to the supervisory Board
12. proposal to authorize the executive Board to issue common shares
13. proposal to authorize the executive Board to restrict or exclude pre-emptive rights upon issuing common shares
14. proposal to authorize the executive Board to issue common shares under incentive plans
15. proposal to authorize the executive Board to acquire shares in the company
16. retirement of mr. D.G. eustace as a member of the supervisory Board (*)
17. any other business (*)
18. close of the meeting (*)
the annual report 2009 is available on aeGon’s corporate website (www.aegon.com). Hard copies can be obtained by
completing the order form on the website.
(*) these items will not be voted upon.
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eXplaNatiON OF the ageNDa
1. opening
opening of the meeting by the chairman, mr. D.G. eustace.
the draft minutes of the aGm of april 22, 2009 were
published on aeGon’s corporate website on July 22, 2009
and have been available for comments since then. the
minutes were signed by the chairman and the secretary on
october 22, 2009 and have been available on the corporate
website, www.aegon.com as from that date.
2. Presentation on the course of business and significant
events in 2009
the executive Board will give a presentation on the course of
business in 2009.
3.1� annual report 2009
3.2� Corporate governance chapter in the annual
report 2009
3.3� annual accounts 2009: Proposal to adopt the
annual accounts 2009
Discussion on the annual report 2009, which includes the
executive Board report, the supervisory Board report, the
corporate Goverance of the company and the annual
accounts 2009. it is proposed that shareholders adopt the
annual accounts for the year 2009.
general matters:
° registration of attendance is required prior to the start of the meeting. Please see also the notes under the
headings 'admittance to the Meeting and voting rights' and 'registration of attendance' on page 8 of this agenda.
° electronic voting at the meeting: note that upon registration shareholders and proxy holders will receive an
electronic voting device and a voting card for exercising their voting rights during the meeting.
° audio/visual recordings during the meeting are not allowed unless prior written permission is granted.
° Sandwiches will be served after the meeting.
° the Chairman will chair the meeting in english; simultaneous translation via headphones (from english into
dutch and from dutch into english) is available.
4. dividend 2009
aeGon’s dividend policy was explained and discussed during
previous aGms. this policy has not changed. the policy aims
to pay adequate and growing dividends to the holders of
common shares, depending on the cash flow and capital
position. the cash flow is determined by the ability of the
operating companies to pay out dividends to the holding
company, while maintaining strong capitalization of the
operating companies. the capital position is determined by
the relative size of the capital components, such as
shareholders’ equity, and (junior) subordinated perpetual
securities. Given the uncertain environment, the company
believes that it continues to be prudent to maintain a
substantial capital buffer, as reflected in the strong capital
position. although impairments improved during the second
half of the year, they remained at elevated levels, which led to
lower cash flows from our operating units. consequently,
aeGon will not declare a dividend to common shareholders.
5. Proposal to release the members of the executive
Board from liability for their duties
it is proposed that the executive Board members be released
from liability for their duties to the extent the exercise of such
duties is reflected in the annual report 2009 or has
otherwise been disclosed to shareholders prior to the
adoption of the annual accounts 2009.
ageNDa annual general Meeting of Shareholders 5 / 24
6. Proposal to release the members of the Supervisory
Board from liability for their duties
it is proposed that the supervisory Board members be released
from liability for their duties to the extent the exercise of such
duties is reflected in the annual report 2009 or has otherwise
been disclosed to shareholders prior to the adoption of the
annual accounts 2009.
7. Proposal to appoint the independent auditor
it is proposed, in accordance with the recommendation of the
audit committee, that ernst & Young be appointed as the
independent auditor for the annual accounts 2010. according
to the partner rotation plan, the lead-partner will not serve
longer than five years and the engagement partner will not
serve longer than seven years.
8. Proposal to amend the articles of association of
the Company
it is proposed to amend the articles of association of aeGon
n.v. this amendment has been previously approved by the
supervisory Board. the complete text of the proposed
amendments and the explanation are available on pages 10
through 14 of this agenda.
9. Proposal to adopt a new executive Board
remuneration Policy
it is proposed to adopt a new remuneration policy for the
members of the executive Board. the current remuneration
policy was adopted by shareholders in 2007. for the current
remuneration policy, please refer to the annual report for
2009, page 66 to 68. the proposed new remuneration policy
for the members of the executive Board is available on pages
16 through 21 of this agenda. upon adoption by shareholders
it will be effective retroactively as from January 1, 2010.
10. Proposal to amend the Supervisory Board
remuneration Policy
it is proposed to amend the remuneration policy for the
members of the supervisory Board as from January 1, 2010
as follows:
° committee meetings: under the current remuneration
policy, attendance fees are paid for each committee
meeting attended in person. Given the increased
availability of video- and telephone conferencing facilities,
it is proposed to also apply the attendance fee structure to
meetings that are not attended in person.
°� supervisory Board meetings: under the current
remuneration policy, no attendance fees are paid to
members for the attendance of the seven regular
supervisory Board meetings (quarterly results-, annual
report-, strategy- and budget meetings). it is proposed to
introduce an attendance fee of eur 3,000 for each
additional supervisory Board meeting (on top of the seven
mentioned), attended in person or by video- or telephone
conference.
although the base fee for members of aeGon’s supervisory
Board is found to be below prevailing market levels, the
supervisory Board decided not to propose an increase of the
base fee to the shareholders at this year’s aGm.
11. Proposal to reappoint Mr. K.J. Storm to the
Supervisory Board
it is proposed that mr. K.J. storm be reappointed as a member
of the supervisory Board for another term of four years as of
april 29, 2010, his four-year term of office expiring as per that
date. He is eligible for reappointment and is willing to remain
on the supervisory Board. information regarding mr. storm is
available on page 22 of this agenda.
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12. Proposal to authorize the executive Board to issue
common shares�
it is proposed that the following resolution be taken:
“the General meeting of shareholders hereby resolves to
authorize the executive Board, for a period of eighteen (18)
months starting april 29, 2010, as the company body which,
subject to the prior approval of the supervisory Board, shall
be authorized to decide on the issuance of common shares in
the company and the granting of rights to acquire common
shares in the company. this authority shall be limited annually
to 10% of the capital, plus 10% of the capital if the issuance
or the granting of rights occurs on the occasion of the
acquisition of an enterprise or a corporation. the term ‘capital’
means the total par value of common shares issued at the
time this authorization is used for the first time in any calendar
year. this authorization may only be withdrawn by the General
meeting of shareholders on a proposal of the executive
Board, previously approved by the supervisory Board.”
explanation:
in accordance with Dutch law, it is proposed that shareholders
authorize the executive Board to decide on an issuance of
aeGon n.v. common shares, subject to supervisory Board
approval. this will allow the executive Board to be flexible and
to react quickly to circumstances necessitating an issue of
common shares, without having to wait for shareholders’
approval. this authorization can be used for any and all
purposes other than for incentive plans and is limited to
the extent expressly provided in the text of this proposed
resolution. issuances of common shares are publicly
announced by press release and on www.aegon.com. upon
adoption, this resolution will replace the authorization
granted in 2009.
13. Proposal to authorize the executive Board to
restrict or exclude pre-emptive rights upon issuing
common shares
it is proposed that the following resolution be taken:
“the General meeting of shareholders hereby resolves to
authorize the executive Board, for a period of eighteen (18)
months starting april 29, 2010, as the company body which,
subject to the prior approval of the supervisory Board, shall
be authorized to restrict or exclude pre-emptive rights of
existing shareholders upon the issuance of common shares or
the granting of rights to subscribe for common shares in the
company, provided that this shall be limited annually to 10%
of the capital, plus 10% of the capital if the issuance occurs
on the occasion of the acquisition of an enterprise or a
corporation. the term ‘capital’ means the total par value of
the common shares issued at the time this authorization is
used for the first time in any calendar year. this authorization
may only be withdrawn by the General meeting of
shareholders on a proposal of the executive Board,
previously approved by the supervisory Board.”
explanation:
in accordance with Dutch law, it is proposed that shareholders
authorize the executive Board to restrict or exclude pre-
emptive rights of existing shareholders upon an issue of
aeGon n.v. common shares (or upon the granting of rights to
subscribe for aeGon n.v. common shares), subject to
supervisory Board approval. this authority, in combination
with the authority under agenda item 12 will allow the
executive Board to be flexible and to react quickly to
circumstances necessitating an issue of common shares
without or with limited pre-emptive rights, without having to
wait for shareholders’ approval. this authorization is limited
to the extent expressly provided in the text of this proposed
resolution. issuances of common shares are publicly
announced by press release and on www.aegon.com. upon
adoption, this resolution will replace the authorization
granted in 2009.
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14. Proposal to authorize the executive Board to issue
common shares under incentive plans
it is proposed that the following resolution be taken:
“the General meeting of shareholders resolves to authorize
the executive Board, for a period of eighteen (18) months and
effective april 29, 2010, to issue common shares and/or to
grant rights to subscribe for common shares to employees and/
or management of aeGon n.v. and/or companies with which
aeGon n.v. forms a group, based on a group-wide incentive
plan or the remuneration policy for the executive Board, as
adopted. this authorization shall be limited annually to 1% of
the total nominal amount of the common shares issued at the
time that this authorization is used for the first time in any
calendar year. this authorization may only be withdrawn by the
General meeting of shareholders on a proposal of the
executive Board, previously approved by the supervisory
Board.”
explanation:
this authorization is identical to the one granted in previous
years with the exception of 2009, when authorization was not
requested. aeGon has developed a long-term incentive
compensation program for its senior management including
the executive Board. this authorization includes the shares to
be granted to the members of the executive Board, based on
the remuneration policy for the executive Board, as proposed
under agenda item 9.
15. Proposal to authorize the executive Board to
acquire shares in the Company
it is proposed that the following resolution be taken:
“the General meeting of shareholders resolves to authorize
the executive Board for a period of eighteen (18) months and
effective april 29, 2010, to acquire, for a consideration, shares
in aeGon’s own capital. the number of shares that may be so
acquired shall not exceed ten percent of aeGon’s total issued
capital. common shares may only be acquired at a price not
higher than 10% above the quoted local market price
immediately prior to the acquisition. preferred shares may only
be acquired at a price not higher than 10% above the average
paid-in amount on the preferred shares being acquired, to be
increased with dividend accrued but not yet paid at the time
of the acquisition.”
explanation:
this authorization is identical to the one granted in previous
years. although according to Dutch law and the articles of
association (as amended, see agenda item 8) a repurchase of
common and/or preferred shares for a consideration is possible
in such a way that the aggregate par value of the shares
aeGon acquires, holds, holds as collateral or held by a
subsidiary, may not exceed fifty percent of aeGon’s total
issued capital, it is proposed to limit this authorization to ten
percent of aeGon’s total issued capital. this authorization will
allow the executive Board to be flexible and to react quickly to
circumstances necessitating a repurchase of aeGon n.v.
shares and can be used for any and all purposes. upon
adoption, this resolution will replace the authorization granted
in 2009.
16. retirement of Mr. d.g. eustace as a member of
the Supervisory Board
mr. D.G. eustace will step down as member of the supervisory
Board on april 29, 2010, at the end of the General meeting of
shareholders. mr. r.J. routs will succeed him as chairman.
17. any other business
18. Close of the meeting
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admittance to the Meeting and Voting rights
the executive Board has determined that the record Date for
the aGm in 2010 is march 30, 2010. this is the date on which
one has to be a shareholder (after all purchase and sale
transactions per that date have been processed) in order to
exercise meeting and voting rights at aeGon n.v.’s aGm.
the shares will not be blocked until the date of the aGm.
on shares acquired after march 30, 2010, the acquirer cannot
exercise meeting rights or voting rights at aeGon n.v.’s
aGm on april 29, 2010.
shareholders holding their shares in a securities account
under the Dutch giro-system (or their proxies as the case may
be) who wish to attend the aGm, are required to notify their
intended attendance with royal Bank of scotland,
amsterdam, the netherlands ('rBs'), on april 22, 2010 at the
latest. this notification can be made through their bank or
stockbroker or other affiliated institution in the netherlands
within the meaning of the Dutch Wet Giraal effectenverkeer
('Giro securities transactions act'), by submitting a
statement of the affiliated institution regarding
shareholdership on the record Date as mentioned above.
shareholders registered in the company’s register of
shareholders are required to inform the company of their
intention to attend the 2010 aGm on april 22, 2010 at the
latest.
the agenda with explanatory notes and annexes will be sent
to shareholders registered in the company’s register of
shareholders and to shareholders using the services of the
Dutch 'communicatiekanaal aandeelhouders' (shareholders'
communication channel). Holders of new York registry
shares will receive a proxy solicitation notice. shareholders
can also vote without attending the meeting by means of a
written or electronic voting instruction through the e-voting
system of rBs (www.rbs.com/evoting) or the shareholders’
communication channel (www.communicatiekanaal.nl) to the
proxy mentioned in the relevant instruction.
registration of attendance
shareholders or their proxies can only exercise their meeting/
voting rights at the 2010 aGm if they register directly prior to
the meeting. this attendance registration will take place at
the entrance of the meeting room as from 9.00 a.m. until the
start of the meeting at 10.00 a.m. shareholders or their
proxies must provide evidence of their identity by way of valid
identification papers. proxies must also provide proof of their
authorization in writing. upon registration, shareholders and
proxy holders will receive an electronic voting device and a
voting card for exercising their voting rights during the
meeting.
Written questions
aeGon offers shareholders the opportunity to submit
questions concerning items on the agenda until april 21, 2010.
these questions may be combined and shall be dealt with and
discussed at the aGm. all questions should be submitted to
investor relations at [email protected].
the Hague, march 24, 2010
on behalf of the supervisory Board,
D.G. eustace, chairman
annexes: proposal to amend the articles of association of the company.�proposal to adopt a new executive Board remuneration policy.�Biography of person nominated for reappointment to the supervisory Board.�
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ageNDa annual general Meeting of Shareholders 10 / 24
aNNeX 1
ProPoSal to aMend the artiCleS of aSSoCiation of aegon n.V. With offiCial Seat in the hague.
this proposal to amend the articles of association of aeGon n.v. is of a mere technical nature and is connected with certain
recent and expected legislative changes. each of the proposed amendments will be discussed and explained separately
hereinafter.
the proposal includes that each deputy civil law notary and notarial assistant of allen & overy llp (amsterdam office),
attorneys-at-law, civil law notaries and tax advisors be authorised to apply to the Dutch ministry of Justice for the statement
of no objections and to have the Deed of amendment of the articles of association executed.
the text of the proposal below is an english translation of a proposal prepared in Dutch. in preparing the text below, an
attempt has been made to translate as literally as possible without jeopardising the overall continuity of the text. inevitably,
however, differences may occur in translation and if they do, the Dutch text will govern by law. in this translation, Dutch legal
concepts are expressed in english terms. the concepts concerned may be identical to concepts described by the english terms
as such terms may be understood under the laws of other jurisdictions.
teXt ProPoSal
the verbatim text of the proposed amendment is set out below.
the left column contains certain provisions of the articles of incorporation currently in force. the right column only contains
the text of proposed amendments. provisions of the current articles not referred to in the left column remain unchanged.
english translation
in the english translation of the articles, the term Articles of Incorporation will be changed to Articles of Association.�
in the definition of executive Board in article 1, the reference to management board is changed to executive board.�
explanation: these are mere drafting issues and do not concern the Dutch (original) version of the articles of association.
current text: proposed new text:
article 12. own Shares
Article 12.2 (b) Article 12.2 (b) is amended and will read as follows:
the nominal value of the shares which the company the nominal value of the shares which the company acquires,
acquires, holds, holds in pledge or which are held by a holds, holds in pledge or which are held by a subsidiary, does
subsidiary, does not exceed one-tenth of the company's not exceed fifty percent (50%) of the company's issued capital.
issued capital.
ageNDa annual general Meeting of Shareholders 11 / 24
explanation:
in accordance with a legislative amendment that has come into effect on June 11, 2008, implementing the ec Directive
2006/8, the statutory threshold for the acquisition by the company of its own shares will be raised from 10% to 50%.
the amendment does not change the company's policy with respect to the purchase by the company of its own shares.
article 19. representation; Conflicts of interest.
After Article 19.1, a new paragraph 19.2 is inserted, reading as
follows:
the executive Board may appoint officers with general or
limited power to represent the company. each officer shall
be competent to represent the company, subject to the
restrictions imposed on him. the title of such officers will be
decided upon by the executive Board. the authority of an officer
thus appointed may not extend to any transaction where the
company has a conflict of interest with the officer concerned or
with one or more executive Board members.
explanation:
currently the articles of association do not contain a provision with regard to the power of officers (other than board
members) to represent the company. it is now proposed to include such provision in support of the authority of such officers
to represent the company.
Article 19.2 Article 19.2 (old) is amended into Article 19.3 (new) and will read
as follows:
in the event of a conflict of interest between the in the event of a conflict of interest between the company
company and an executive Board member, the company and an executive Board member, the supervisory Board may
shall be represented by an executive Board member or a appoint a member of the executive Board or a member of the
supervisory Board member appointed for that purpose supervisory Board to represent the company.
by the supervisory Board. the General meeting shall
be authorized at all times to appoint one or more other
persons to represent the company in the event of a
conflict of interest with an executive Board member.
explanation:
the proposed amendment is consistent with the provisions pursuant to legislative proposal 31763 which has recently been
adopted by the Dutch lower chamber. the amendment will not change the way in which (potential) conflicts of interests are
dealt with within the company.
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ageNDa annual general Meeting of Shareholders 12 / 24
article 20. approval of executive Board resolutions.
Article 20.2 (c) Article 20.2 (c) is amended and will read as follows:
the application for quotation or cancellation of quotation the application for admission of the securities under (a) and
of the securities under (a) and (b) above on the official list (b) above to a regulated market or multilateral trading facility
of any stock exchange; as referred to in section 1:1 of the Dutch financial markets
supervision act (Wet op het financieel toezicht) or a comparable
regulated market or multilateral trading facility system from
a state that is not a member state, or, as the case may be, the
cancellation of such admission;
explanation:
the proposed amendment concerns an adjustment to the text of the Dutch financial supervision act, as recently amended.
article 29. financial Year and annual accounts.
Article 29.2 Article 29.2 is amended and will read as follows:
annually, not later than five months after the end of the annually, not later than four months after the end of the
financial year, unless by reason of special circumstances financial year, the executive Board shall prepare annual
this period is extended by the General meeting by not accounts, and shall deposit the same for inspection by the
more than six months, the executive Board shall prepare shareholders at the company's office 1. Within the same period,
annual accounts, and shall deposit the same for inspection the executive Board shall also deposit the annual report for
by the shareholders at the company's office. Within the inspection by the shareholders.
same period, the executive Board shall also deposit the
annual report for inspection by the shareholders.
explanation:
in connection with the implementation of the european transparency directive on January 1, 2009 the statutory period
for the preparation of the annual accounts has been changed from five months to four months after the end of the financial
year.
1 on march 29, 2010, the proposal to change article 29.2 was amended by deleting the following: “, unless by reason of special circumstances that period is extended by the General
meeting by not more than six months,”, to bring this proposal in accordance with article 2:101 sub 1 civil code.
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article 32. Profits and distributions
Article 32.3
from the net profit, as reflected in the profit and loss
account, if it is sufficient to this end after a part of the
profit has been set aside for augmenting or forming
reserves in accordance with article 32.1, first of all
the holders of preferred shares shall receive, on the
amount paid on their preferred shares, a dividend the
percentage of which, on an annual basis, shall be equal
to the european central Bank's fixed interest percentage
for basic refinancing transactions, to be increased by one
point seven five (1.75) percentage points, all applicable
to the first day of trading on euronext amsterdam in the
financial year to which the dividend relates.
apart from this, no other dividend is to be paid on the
preferred shares.
explanation:
Article 32.3 is amended and will read as follows:
from the net profit, as reflected in the profit and loss account,
if it is sufficient to this end after a part of the profit has been
set aside for augmenting or forming reserves in accordance
with article 32.1, first of all the holders of preferred shares
shall receive, on the amount paid on their preferred shares, a
dividend the percentage of which, on an annual basis, shall be
equal to the european central Bank's fixed interest percentage
for basic refinancing transactions, to be increased by one point
seven five (1.75) percentage points, all applicable to the first
day of trading on euronext amsterdam in the financial year to
which the dividend relates.
apart from this, no other dividend is to be paid on the
preferred shares.
the authority to charge the payment of the preferred dividend
to the reserves of the company rests with the executive Board
subject to approval by the supervisory Board.
the addition of the final sentence to this article purports to clarify the existing distribution of powers within the company in
connection with the making of distributions.
article 36. notice and agenda of Meetings.
Article 36.2 Article 36.2 is amended and will read as follows:
notice of the meeting shall be given no later than the notice of the meeting shall be given no later than the fifteenth
fifteenth day prior to the date of the meeting. day prior to the date of the meeting or such longer notice period
as the law may prescribe.
explanation:
the proposed amendment anticipates the legislative change in implementing the european directive on shareholders rights
(eG 2007/36), pursuant to which the notice period for general meetings of shareholders (now 15 days) will be extended.
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ageNDa annual general Meeting of Shareholders 14 / 24
Article 36.4
shareholders who, alone or jointly, represent at least
one-tenth percent (0.1%) of the issued capital or a block
of shares, alone or jointly, worth at least fifty million euro
(eur 50,000,000) according to the official price list of
euronext amsterdam n.v. (or any publication taking its
place), shall have the right to request of the executive
Board or the supervisory Board that items be placed on
the agenda of the General meeting of shareholders.
these requests shall be honored by the executive Board
or the supervisory Board under the conditions:
(a) that important company interests do not dictate
otherwise; and�
(b) that the request is received by the chairman of the
executive Board or the chairman of the supervisory
Board in writing at least sixty (60) days before the
date of the General meeting of shareholders.
explanation:
Article 36.4 is amended and will read as follows:
shareholders who, alone or jointly, represent at least one
percent (1%) of the issued capital or a block of shares, alone
or jointly, worth at least one hundred million euro (eur
100,000,000) 1 according to the official price list of euronext
amsterdam n.v. (or any publication taking its place), shall have
the right to request of the executive Board or the supervisory
Board that items be placed on the agenda of the General
meeting of shareholders.
these requests shall be honored by the executive Board or the
supervisory Board under the conditions:
(a) that important company interests do not dictate otherwise;
and
(b) that the request is received by the chairman of the executive
Board or the chairman of the supervisory Board in writing at
least sixty (60) days before the date of the General meeting
of shareholders.
pursuant to legislative proposal 32014 (proposal frijns), now pending before parliament, the threshold for the right of
shareholders to propose agenda items shall be raised. the threshold of 1% shall be raised to 3% and the threshold of a
market value of 50 million euro will be cancelled. the company currently applies a threshold lower than 1%, namely 0.1%.
it is proposed to raise this threshold to 1% (being substantially lower than the new statutory threshold of 3%) and to raise
the threshold relating to the market value to 100 million euro.
1 the deed of amendment of the articles of association will state additionally that the current statutory threshold (the eur 50 million euro in market value), until terminated by law,
will prevail over the higher threshold proposed to be inserted in the articles of association. this clarification is inserted in this proposal on 31 march 2010.
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aNNeX 2
ProPoSal to adoPt a neW eXeCutiVe Board reMuneration PoliCY
1. pOliCY
1. 1 remuneration Policy
this remuneration policy outlines the terms and conditions for the employment and remuneration of aeGon n.v. executive
Board members. the policy will be reviewed every year by the compensation committee of the supervisory Board. if and
when required, this committee will submit recommendations for changes to the policy to the supervisory Board.
1.2 Policy term
this policy will take effect from January 1, 2010. the policy will remain in place until aeGon n.v. has fully repaid the cccs
loan it received in 2008 from the Dutch state - through vereniging aeGon - or until such moment the supervisory Board will
adopt changes.
1.3 application
this policy will apply to members of the aeGon n.v. executive Board.
2. terM OF appOiNtMeNt
members of the executive Board will be appointed for four years and may then be reappointed for successive mandates of
four years.
3. COMpeNSatiON
3.1 aims and objectives
the aims and objectives of the executive Board remuneration policy may be summarized as follows:
° the remuneration policy aims to enable the company to attract and retain highly qualified members for the executive
Board.
° the policy seeks to enable the company to provide a well-balanced and performance-related executive Board
compensation package, taking into consideration the public debate on remuneration.
° the remuneration policy will ensure that the interests of executive Board members are aligned with the business
strategy and risk tolerance, objectives, values and long-term interests of the company.
° the policy shall enhance the transparency and simplicity of executive Board members’ remuneration and will be
consistent with the pay-for-performance principle.
ageNDa annual general Meeting of Shareholders 17 / 24
3.2 evaluation of Competitive level
the competitive level of executive Board compensation will be monitored against the remuneration of a group of peer
companies on an annual basis.
companies to be included in the remuneration peer group are selected according to the following criteria:
° industry: preferably life insurance.
° size: assets, revenue and market capitalization.
° Geographic scope: preferably companies operating globally.
° location: europe-based.
in 2010, the peer group comprises the following companies: aviva, aXa, cnp assurances, Generali, inG Group, legal &
General, münchener rückversicherung, old mutual, prudential plc, standard life, swiss re, Zurich financial services.
to monitor alignment with Dutch general industry, an additional reference group has been established, consisting of Dutch
listed companies (aeX top 12 excluding financial services companies).
the supervisory Board will regularly review and where necessary amend the groups to ensure they continue to provide a
reliable basis for comparison.
3.3 total Compensation
3.3.1 total Compensation levels
for each executive Board member, the supervisory Board will determine a maximum total compensation, taking into
account the specific role and responsibilities of the individual. the 2009 compensation levels of the executive Board
members - adjusted for annual salary adjustments in the aeGon nederland n.v. collective labor agreement - will serve as
the initial reference point. each year, the supervisory Board will review total compensation to ensure that it continues to be
competitive and provides proper and risk-based incentives to members of the executive Board.
3.3.2 total Compensation Structure
total compensation for executive Board members will consist of a fixed component, as well as short and long-term incentive
compensation. the table below gives the breakdown for each of these three components; the figures present fixed and
variable compensation at maximum level as a percentage of total compensation in 2010.
Fixed Compensation Variable Compensation (at maximum level)
Short-term Long-term
50 % 16.7 % 33.3 %
the supervisory Board will regularly assess the possible outcomes of variable compensation components and how they may
affect the remuneration of the executive Board members (‘scenario analysis’).
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3.4 fixed Compensation
for each executive Board member, the supervisory Board will determine the amount of fixed compensation as part of
maximum total compensation.�
3.5 Variable Compensation
3.5.1 general
variable compensation will be used to strengthen executive Board members’ commitment to the company’s short-term and
long-term objectives, with emphasis on the long-term sustainable performance. in the process of setting and evaluating
performance indicators and targets used for the determination of variable compensation, relevant experts, such as finance,
risk, audit, Human resources, legal, and compliance, shall be involved.
variable compensation consists of a short-term incentive compensation (stic) component and a long-term incentive
compensation (ltic) component:�
° stic will be paid in cash. payment will be made once annual accounts for the financial plan year have been adopted by
shareholders.
°� ltic will be paid in shares. at the beginning of the 3-year performance period, a conditional grant will be made, which
might (partly) vest following the procedure set out in section 3.5.2.2 and under the condition of continuous employment.
the number of performance shares that will be granted conditionally is calculated according to the fair value of one
share at the start of that financial year (average share price on the nYse euronext stock exchange during the period
December 15 and January 15). at the end of the 3-year performance period, the vested shares will be restricted for a
period of two years (with the exception of the shares that would have to be sold to cover income tax obligations resulting
from the vested shares).
variable compensation will be based on company (and individual) performance as measured against certain indicators,
as outlined in section 3.5.2.1 and 3.5.2.2. the indicators represent a mix of financial and non-financial measures, providing an
accurate and reliable reflection of corporate and individual performances. performance targets will be determined for each
of the indicators.
3.5.2.1 Short-term incentive Compensation
stic will be based on financial and non-financial indicators, for which performance target ranges will be set annually.�
° financial:�
- earnings (37.5%): real net growth in underlying earnings after tax;
- profitable growth (37.5%): value of new business, adjusted for risk.�
° non-financial:�
- individual basket of strategic and personal objectives (25%).
(Percentages refer to maximum performance.)
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each year, a 1-year target will be set for each indicator. at the end of that year, a comparison will be made between the targets
and actual performance. stic pay-out will be calculated according to the results of this assessment.�
at an aggregate level, pay-out of 50% of the maximum stic will occur if the threshold performance target is reached;
matching the pre-set performance target will deliver pay-out of 80% of the maximum stic; outperformance will lead to pay-
out of up to 100% of the stic.�
3.5.2.2 long-term incentive Compensation
ltic will be based on financial and non-financial indicators, for which performance target ranges will be set.
° financial:
- earnings (20%): real net growth in underlying earnings after tax;
- return on capital, adjusted for risk (20%);
- relative total shareholder return (35%), measured against a group of companies with which aeGon competes for
shareholder preference.
° non-financial:
- Basket of objectives measuring corporate responsibility (25%).
(Percentages refer to maximum performance.)
the companies against which aeGon measures total shareholder return are selected according to the following criteria:�
° industry: life and health insurance, multi-line insurance.�
° scope: revenues, total assets, number of employees, market capitalization.�
° internationational activities: geographic scope.�
° location: europe and north america.�
° free-float of outstanding shares: minimum 70%.�
° risk profile: comparable s&p rating range.�
in 2010, the tsr peer group comprises the following companies: aviva, aXa, Generali, Hartford financial services Group,
legal & General, manulife financial, metlife, principal financial Group, prudential financial, prudential plc, metlife, sun life
financial, Zurich financial services.�
ltic will be based on performance over a 3-year period. each year, a 3-year target will be set for each indicator. at the end
of the 3-year period, a comparison will be made between the targets and actual performance. ltic pay-out will be calculated
according to the results of this assessment.
at an aggregate level, pay-out of 50% of the maximum ltic will occur if the threshold performance target is reached;
matching the pre-set performance target will deliver pay-out of 80% of the maximum ltic; outperformance will lead to
pay-out of up to 100% of the ltic.�
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3.5.3 discretionary adjustments (‘test of reasonableness’)
the supervisory Board will have the authority to make adjustments to the variable compensation (‘test of reasonableness’).
implementation of this authority will be as follows:�
° should the supervisory Board decide that aeGon’s short-term or long-term business is being impacted by significant
and exceptional circumstances that are not (sufficiently) reflected in the performance indicators, it may request the
compensation committee to consider possible adjustments.
°� the compensation committee will review all circumstances in detail and document its findings. if the committee’s analysis
confirms the supervisory Board’s initial assessment, the committee will then put forward a proposal to the supervisory
Board to adjust stic or ltic.
° actual stic or ltic may be adjusted to a level between 75% and 125% of the originally calculated entitlement, but will not
exceed 100% of the maximum variable compensation.
° While it is theoretically possible under this system to arrive at stic or ltic of zero, the supervisory Board has the
authority, if justified by the circumstances, to grant a discretionary payment.
° Discretionary adjustments concern actual stic or ltic only, not fixed compensation.
3.5.4 Circuit Breaker
in any given year, pay-out under stic will only occur subject to aeGon n.v. reporting a net profit.
3.5.5 Claw Back
the supervisory Board will have the authority to re-claim (‘claw back’) any pay-outs under stic, in case of material financial
restatements or individual gross misconduct. With regard to ltic, the 3-year performance period in itself provides for a
sufficient period to identify any potential errors.
3.6 Pensions
executive Board members will be offered pension arrangements and retirement benefits in line with local practices in their
countries of residence and consistent with those provided to executives of other multinational companies in those countries.
3.7 Benefits and other arrangements
executive Board members will receive other benefits based on their contractual agreements, local practices, and comparable
arrangements for executives of other multinational companies.
the company will not grant executive Board members any personal loans, guarantees or the like, unless in the normal course
of business and on terms applicable to all personnel, and only with supervisory Board approval.
3.8 termination of employment
employment contracts for new members of the executive Board shall contain a notice period of three months for the
executive Board member and six months for the company. termination arrangements (in all circumstances, including change-
of-control) will conform to the Dutch corporate Governance code and Dutch law. the maximum severance payment for
members of the executive Board is, if the employment contract is terminated or cancelled upon request of the company, one
year’s gross fixed compensation.
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3.9 existing Contractual arrangements
as far as existing contractual arrangements of (current) executive Board members do not comply with this policy, the
supervisory Board will take action as deemed appropriate.
3.10 Verification
all calculations made to determine compensation under this policy shall be verified by both independent external auditors
and the supervisory Board’s audit committee.
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aNNeX 3
the biography of Mr. K.J. Storm as required by dutch law regarding the nomination for his reappointment
to the Supervisory Board as mentioned in agenda item 11 is as follows:
name : Kornelis J. storm
age : 67
Gender : male
nationality : Dutch
profession/main occupation : retired
former occupation : chairman of the executive Board of aeGon n.v. until 2002
shares in the company : 276,479 common shares
membership of other Boards : chairman of the supervisory Board of Klm royal Dutch airlines n.v.
vice chairman of the supervisory Board of pon Holdings B.v.
member of the Board of Directors of anheuser-Busch inBev s.a.
(Belgium)
member of the Board of Directors of Baxter international inc. (usa)
non executive director of unilever n.v. / plc (netherlands /
united Kingdom)
mr. storm is nominated for reappointment because of his managerial experience and experience with large listed companies,
his knowledge of the insurance industry, his sound business orientation and international experience, and his satisfactory
functioning as a member of the supervisory Board since his appointment in 2002.
mr. storm, born in 1942 in the netherlands, has the Dutch nationality. after attending High school, he completed courses in
accounting and business administration. in 1969, he graduated from the erasmus university in rotterdam, specializing in
business economics. in 1972, mr. storm graduated as a certified public accountant. after serving as a certified public accountant
at moret & limperg until 1976, and as a member of the executive Board of Koninklijke scholten Honig n.v. until 1978, mr. storm
joined aGo (one of aeGon’s predecessors) in 1979 as a member of the executive Board. in 1983, he was appointed a member of
the executive Board of aeGon n.v. and in 1992 he was appointed chairman of the executive Board, the function he held until
his retirement in 2002. in that year, mr. storm was appointed a member of aeGon n.v.’s supervisory Board.
the nominating committee has discussed mr. storm’s qualifications and in particular his functioning as a member of the
supervisory Board and established that, although he is not ‘independent’ in the sense of the Dutch corporate Governance
code, he is the only ‘non-independent’ member of the supervisory Board. Both the corporate Governance code and the
profile of the supervisory Board allow that one member of the supervisory Board is ‘non-independent’. the nominating
committee also established that mr. storm fits the profile of the supervisory Board very well and, after careful
consideration, advised the supervisory Board to nominate mr. storm for reappointment. the supervisory Board followed
that advice and recommends to shareholders that mr. storm be reappointed as a member of the supervisory Board for a
term of four years as from april 29, 2010. mr. storm has no conflicts of interest with aeGon.